Restaurant industry at center of minimum wage debate

New Mexico a player in local & national issue

by Steve “Mo” Fye

ALBUQUERQUE, N.M. — The restaurant business is one of close margins, where even small increases in costs can make the difference between success and failure. This makes the industry ground zero for the current debate — locally and nationally — over an increase in the minimum wage.

Restaurant owners worry that a hike will cut into their profits while more and more employees and advocacy groups are rallying for a living wage.

Rep. Michelle Lujan Grisham speaks in Albuquerque at the “Give America a Raise” bus tour, sponsored by Americans United for Change, April 22, 2014.

Supporters of an increase in the minimum wage say it is a human rights issue, not just an economic issue. They refute as overblown claims by industry groups and conservatives that hikes would cause runaway inflation and unemployment.

In New Mexico, State Rep. Miguel P. Garcia (D-ABQ-14) sponsored House Joint Resolution 9 in the most recent legislative session. The resolution would have amended the state constitution to establish a statewide minimum wage that would increase annually based on cost of living adjustments. The legislation did not pass the house vote, and a similar measure failed in the senate.

Every Republican in the house voted against the measure, but Garcia said he will continue to work to get a state minimum wage.

“We got 33 for and 29 against. We needed 36. It’s not just an economic decision. It’s a human rights issue,” he said.

“The numbers in the house will be brighter in the next session,” Garcia said. “We hope to add some swing seats in November.”

Garcia said he wants to work on a compromise with opponents of the legislation. He said he is willing to accept an incremental increase and cap the annual indexing at 4 percent.

According to his data, 67 percent of minimum wage workers in New Mexico work for larger corporations.

“It’s places like Wal-Mart, McDonalds and fast food places that will be affected,” he said. “Not mom and pop restaurants.”

Industry groups fear unemployment, inflation

CEO of the New Mexico Restaurant Association, Carol Wight said her organization opposes any amendment to the state constitution because such a measure would make it difficult to alleviate any unintended effects.

“How much do you want to pay for a burger?”

— Carol Wight, CEO NMRA

Wight said she is concerned that such an irreversible action could lead to unemployment or inflation.

“How much do you want to pay for a burger?” she said.

The restaurant association has helped to craft language for legislation to increase the minimum wage in local municipalities, she said.

Wight called the Bernalillo County minimum wage increase “easy to comply with,” and a “model ordinance for other communities.”

The county raised the minimum wage to $8 per hour July 1, 2013 and to $8.50 the first day of 2014.

She said the Bernalillo County increase would be easy for restaurant owners to take into consideration when making a budget.

“Those people did their homework,” she said.

The “Give America a Raise” tour bus pulls into Albuquerque on April 22, 2014. The rally called for a higher national minimum wage of $10.10 per hour.

On the other hand, she said the Albuquerque minimum wage hike was not well thought out and is unfair to restaurant owners and kitchen employees alike.

The city measure, enacted in 2012, increased back of the house (line cooks, prep cooks and dishwashers) wages by only about 15 percent, while front of the house employees (tipped employees such as wait staff) got a 143 percent raise, she said. This would force owners to cut hours or raise prices, she said.

“Servers often make $16 to $22 an hour on top of the hourly pay,” she said.

Wight claims her association would support an incremental increase in hourly minimum wage for restaurant workers if it was done at a reasonable pace.

“Our mantra for right now is ‘let’s be reasonable,’” Wight said.

Other places see positive effects of higher minimum wages

Measures across the country that increased the local minimum wage to above the national rate seem to be working, despite dire predictions from industry groups.

In 1998, Washington State raised the minimum wage and tied it to the cost of living. Since then, the state minimum wage has increased to $9.32, according to the Washington Department of Labor.

An article on Moneynews.com reported that job growth in Washington averaged 0.8 percent per year. Over that same time, the national job growth rate was 0.5 percent. The poverty level in Washington has been lower than the national average for more than seven years..

The average payroll for bars and restaurants in Washington increased by 21 percent, despite fears that the hospitality industry would suffer the loss of jobs and employee hours, according to the same article.

Jared Ames is the New Mexico director of Working America, an organization affiliated with the AFL-CIO that supports workers not represented by unions. The group has been involved in the effort to increase the minimum wage since 2007.

“We worked on the ballot initiatives in Albuquerque, Santa Fe County, Bernalillo County and now the state,” he said. “We represent 110,000 New Mexicans and are working for a positive change.” The group will continue to work towards a living wage, he said.

Group calls for Congress to ‘Give America a Raise’

Members of another advocacy group, Americans United for Change, focused on addressing income inequality, and have been traveling across the country on the “Give America a Raise” bus tour, raising support for a $10.10 national minimum wage.

Originally scheduled for 11 states, the tour will now stop in 20 or more, according to Jimmy Donofrio, digital director of the organization.

On April 22, the group held a press conference at Focus Ink in Albuquerque.

“When people make a living wage, local economies thrive”

— Rep. Michelle Lujan Grisham

Nancy Denker, owner of Focus Ink, said it was fortuitous that the event coincided with Earth Day. She said Earth Day is about sustainability, and the tour supports economic sustainability. Denker pays all of her employees a living wage, she said.

Michelle Lujan Grisham (D-NM) also spoke at the gathering. She said she is happy that Albuquerque raised the minimum wage, but now it is time for Congress to do the same for America. An increase in the national minimum wage would put $35 billion into the hands of the families that need it most, she said.

“When people make a living wage, local economies thrive,” she said. “This is a moral issue for New Mexico families and families across the U.S. We must make sure our families don’t fall further behind.”

Steve “Mo” Fye is studying journalism at UNM and serves as Managing Editor for the Daily Lobo.